The Big ICE Meltdown — May’s China EV Sales Report

China’s electric vehicle (EV) market experienced a dramatic shift in May 2026, driven largely by a steep decline in internal combustion engine (ICE) vehicle sales. Overall passenger car sales fell by 22% year-on-year to approximately 1.5 million units, with ICE models plummeting 39%. In contrast, battery electric vehicles (BEVs) bucked the trend, increasing sales by 4% to 637,000 units despite reduced incentives. This dynamic pushed the combined plug-in vehicle market share to a record 63% for the month, with BEVs alone capturing 42%, signalling a significant milestone in China’s transition to electrification. The data reveals a clear divergence between domestic and foreign automakers, with local brands achieving an impressive 81% EV market share. This suggests that domestic manufacturers are rapidly phasing out ICE vehicles, likely due to shrinking demand and a focus on export markets. Foreign brands, meanwhile, appear to be clinging to their remaining ICE sales in a market that is swiftly moving away from traditional powertrains. The top-selling vehicle rankings reflect this trend, with May marking the first time an all-EV top 10 emerged, including seven pure electric models dominating the list. Notable individual models illustrate the evolving landscape. Geely’s Xingyuan hatchback secured the best-selling spot with nearly 39,000 registrations, maintaining its strong performance from the previous year. Tesla’s Model Y, buoyed by its extended wheelbase “L” version, rose 17% year-on-year to almost 29,000 units, cementing its position as a key player despite stiff competition. Xiaomi’s SU7 sedan, while experiencing a 14% decline, remained the best-selling sedan in China, highlighting both the potential and volatility of newer entrants in the EV market. BYD’s midsize Song SUV also held a firm position amid its ongoing transition to a flash-charging capable model. Looking ahead, the rapid electrification trend in China is expected to continue, with projections suggesting that EVs could exceed 60% market share by the end of 2026 and BEVs alone surpassing 40%. Industry observers anticipate full electrification of China’s passenger car market by 2030, a development that would have profound implications globally. The decline of ICE vehicles in the world’s largest automotive market signals a potential endgame for combustion engines worldwide, calling into question the viability of continued investment in ICE technology research and development.